What Is Decentralization?

Centralization vs. Decentralization

What is it? Why is it such a big deal? Will it really affect my everyday life?

These, and other questions may arise when learning about the new technology.

The Internet is a centralized mess, and decentralization may be the answer. Decentralization describes the design of a network that isn’t managed by a central party. Instead, peer-to-peer interaction drives the network, as no third party is needed!

While there are many facets to understanding blockchain, it’s important to grasp the concept of centralization versus decentralization.

Centralization & Decentralization

By definition, the two are the antitheses of one another.

BY DEFINITION, CENTRALIZATION IS

“the concentration of control of an activity or organization under a single authority.”

FROM THE SAME SOURCE, DECENTRALIZATION IS

“the movement of departments of a large organization away from a single administrative center to other locations.”

To learn more about decentralization, check out our video below!

Essentially, if something is centralized, there’s a single point that does all of the work involved in any given action. On the flip side, if something is decentralized, there are multiple points that do the work.

CENTRALIZED

DECENTRALIZED

Think about it this way: the US government is split into both centralized and decentralized parties. In this case, the federal government is centralized. This is because it resides in Washington, DC, and all decisions are made from this particular location. On the other hand, state governments and legislatures are decentralized because there are 50 spread throughout the United States. The states must work in tandem, in order to be a cohesive unit, while the federal government works as a single unit.

Now, this is not a perfect example, but it does a phenomenal job of giving a visual about the concept of centralization vs decentralization.

What next, though? What in the world does the concept of centralization have to do with blockchain?

Ready to blow your mind? Well hold onto your shorts!

Big Names in the Game

Systems are either centralized or decentralized. Both types of networks currently exist, and you’ve more than likely interacted with or heard of at least one of each.

Centralized platforms require all data (communications/information/etc.) to enter into, and leave through a central hub. That is to say, you physically can’t send or receive any information without it going through that single point, which is often a private server or hub.

Unlike centralized platforms, decentralized platforms do not require information to pass through a single point. Instead, many points connect, known as a peer-to-peer (P2P) network.

POPULAR CENTRALIZED PLATFORMS:

Facebook

Google

DECENTRALIZED PLATFORMS:

BitTorrent

LimeWire

When you download a torrent file, you are interacting with a decentralized network. Torrenting is essentially the sharing of a particular file across a large network. Let’s say you want to download a copy of your favorite movie, from a popular website such as Pirate Bay. When choosing the best file to download, you’ll notice two numbers dubbed “seeders” and “leechers.”

Seeders refer to the number of people currently uploading the file, while leechers refer to the number of people downloading the file.

A high number of seeders to leechers is ideal, in order to speed up the download process. Even if you do not download anything (don’t worry, many of us don’t!), torrents are a phenomenal way to see a P2P (decentralized) network in action!

Is One Better Than the Other?

Since centralized platforms require all data to go through one place, it’s very easy to track information. For example, Google is the behemoth it is because it collects massive amounts of data thanks to the fact everything goes through a single point.

Gmail, Google’s email service, has such incredible spam filters because it can see into almost everyone’s email. In much the same way, Facebook is the king of data collection because literally billions of users interact with the platform every day. In a nutshell, centralized platforms make for extremely easy collection of data.

This begs the question, however,

Who would love to use this type of technology?

Governments, of course! Any and all foreign data incoming to the United States must pass through a server, which any given department may comb through. While not exactly a breach of privacy, it certainly doesn’t sit well knowing that any and all information, or actions taken on a centralized network are constantly being monitored.

Decentralized platforms, on the other hand, allow for far more privacy. Because information doesn’t have to go through one point, and can instead pass through a variety of points, it’s much more difficult to track information across the network.

So, if you’re looking to protect your identity—or online information—using a decentralized system is ideal. Instead of allowing platforms like Facebook or Google to bundle up and sell your information (which they absolutely do!), blockchain is the answer to taking back control of your own data.

Blockchain and Centralization

A decentralized network relies on a host of computers. As a result, blockchain technology resides on a P2P network. It physically cannot work with a single computer or point-of-connection. Instead, it requires a slew of other computers to join in, in order to complete a specific task on the network.

What is a blockchain, though? It’s a constantly growing chain of ordered information (i.e. blocks). These blocks have a timestamp, and a link to the previous block. The great thing about these blocks is they’re built in such a way that they cannot be modified once they’ve been recorded. What this means is that once information is there, it stays there. You can’t go back in and manipulate it somehow, post creation. (For a more in-depth look at blockchain technology, check out our WTF is blockchain guide!)

In this way, blockchains are secure by design. This is because the information is not only timestamped, it’s also stored in such a way that you’d have to get into every single computer at the same time, to hack into the network.

Because centralized networks have a single point of data collection, they’re extremely susceptible to hacking. Blockchain technology, and in turn decentralization, is an effective way to work around this weakness. So, storing information on a peer-to-peer network is best in terms of security.

To Sum It Up

Both centralized and decentralized networks currently exist in popular platforms. Centralized platforms certainly have their time and place, especially for watching all activity on a network. Blockchain, and decentralized (peer-to-peer) networks are poised to become the biggest thing since sliced bread. In addition to affecting large companies, it’s a great tool for the individual. Blockchain is for everybody!

Now that you’ve learned about what decentralization is and how it works, keep the ball rolling! The Blockchain Institute have answers to your most Frequently Asked Questions about blockchain technology.